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POSTED BY ON November 20, 2011 8:38 am COMMENTS (3)
Dear Friends,
Due to my laziness to think before making a decision on investment, I ended up choosing Wealth Plus and Market Plus 1 as investments options in monthly payable mode. To be honest, these two investments were not made keeping insurance as top priority, as I have a term insurance, which is a good coverage. Looking at the fund management charges and other fees, I realized that it would have been much better to invest the same money in a Equity Diversified / Balanced Mutual Fund, where there would be no deductions as charges and fees. Now I am in a dilemna, whether to continue to pay or discontinue
I would request you to kindly let me know, what would happen if I discontinue with these investments right away, even before 3 years from the commencement date. Secondly, if I choose to stop after 3 years, would it be prudent to withdraw the money after paying for 3 years, or contine to hold the investment, without paying.
I look forward for your valuable suggestions.
Regards,
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Dear Venkatesh, First of all search for your policy docs. read there the details of surrendering the policy. Please do read specifically about surrender charges applicable to you in case you are not paying even 3Y prem.
After paying surrender charges, how much money you are getting back ‘ll be the next question. As you are already covered with adequate term plans, I think for pure investment purpose, you may dump these policies & reinvest the surrender amount as well as future prem. in Eq. MFs
.
Thanks
Ashal
Venkatesh
Most of the ULIP’s can be stopped even before 3 yrs lock in (but after 1 yr payment) , in which case you will get your money only after lock period , but you will not have to pay 2nd and 3rd year premium . you can confirm this by looking at policy brochure and find out what is mentioned in case of surrendering of policy before 3 yrs column.
This will make sure that you do not loose more by paying more .. but this is not a full proof way of securing your already paid money , because now it depends on market value of your fund and the SURRENDER VALUE of the policy in 3rd , 4rth year .. but I think you can now stop making any more payments in this and better reboot this part of your financial life .
Manish
Venkatash,
If you withdraw any insurance policy before three years, the first effect is on the tax advantage you have availed.You will have to forego that and will have to pay the tax which you have saved through premium invested in these policies.
You need to consider the surrender charges in your policies.If its on higher side you may have to continue for some more time.
If you intend to continue paying premium for the term then its advisable to continue with policy.However if you are not interested in paying premiums further then withdrawing the policy would be more viable.